Why There Are So Many Rich Counties Concentrated Around Washington, D.C.

Parts of California, New York, and Connecticut are much richer than the D.C. area, but they often belong to larger counties that include areas with poorer residents.

Twenty-nine of the top 30 areas with the most million-dollar homes are in California or NYC's Tri-State Area. Eight of the ten wealthiest towns are in California and New York State. Forty percent of the nation's billionaires live in California, New York State, and Connecticut. 

But the Washington, D.C., area dominates the list of highest-earning counties, claiming six of the top ten and 13 of the top 30. Why?

The first half of the answer is that Washington, D.C., has an remarkable concentration of high-(but not the highest-)earning households. More than 45 percent of its residents make more than $100,000 a year. There are 13 counties around D.C. where more than half of the households are in the top quartile of the country's earners. 

The federal government has a lot to do with this: The Capitol and the economy orbiting around it (including lawyers, defense contractors, computer engineers along the Dulles Corridor, and doctors near NIH) attract college graduates who reliably contribute to six-figure households. Crucially, there was a $1.7 billion increase in lobbying between 1998 and 2010, as Dylan Matthews explained. With each $1 million of lobbying "associated with a $3.70 increase in the D.C. wage premium," the money pouring into Washington wound up in the pockets of its residents.

The second half of this story comes back to the definition of "counties." Comparing counties can be a bit like comparing apples to, well, enormous fruit baskets. Let's take a look at the ten richest counties in America, by median household income...

... and now here's the population of those top counties (click to better read the names):

Virginia is weird, this way. It has 133 counties and nearly 40 independent cities, putting it second in the country behind only Texas in the number of counties and county equivalents, even though there are 11 states with more people.

Meanwhile Greenwich, Connecticut, with its incredible concentration of finance billionaires and millionaires, belongs to a county with more than 4 million residents (333-times bigger than the country's richest county, Falls Church City, VA). Greenwich's poorer areas pull down the median income and drop it from the top 30 richest counties, altogether.

To be clear: Washington's dominance of the Census county list is not a statistical quirk. It really is a remarkably rich area of the country. Even if the Greater DC Area spanning 30 miles from the Capitol in each direction were one big super-county, it might still have one of the nation's highest median household incomes (just look at the dense rudiness of the map, above).

But it's worth pointing out that when we compare counties, we're comparing wildly different denominators. Some of the richest zip codes in the country often belong to large counties that also contain some poorer areas. Meanwhile, the dearth of poverty around the district makes Virginia and Maryland appear richer in county comparisons.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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